Analysis from the latest Advanced Propulsion Centre UK (APC) quarterly demand report has revealed the UK is expected to hit 2035’s zero-emission vehicle (ZEV) production target.
The forecast maintains previously reported 2035 figures but it also said the increase in demand will be slower than previously anticipated. This is due to global forecasts for 2027 and 2030 reducing by 14% and 12%respectively.
In the short term, the demand for electric hybrids will see increased growth, especially in Europe, but this will eventually give way to an increased appetite from consumers for BEVs. This increase indicates the importance of new investment with the development of battery-cell chemistries continuing at pace, it said.
The demand report forecasts that, globally, the battery demand for passenger cars and light-duty vehicles, such as small vans, will reach around 4 TWh by 2035 – a compound annual growth rate (CAGR) of 14 percent, with the UK and Europe showing a slightly higher CAGR of 17 percent.
The report also emphasised the necessary focus and investment required to develop the supply chain across Europe for cathode active materials (CAM) and anode active materials (AAM).
Julian Hetherington, Automotive Transformation Director at the APC, said:
“It is reassuring to see our predicted figures for 2035 largely on track towards our prior forecast position in the Q1 demand report 2024, acknowledging some near-term reductions reflecting market conditions.
“Aligned with the continuing demand for BEVs, we are also observing advances and innovations in battery chemistries, in particular the adoption of lithium-iron-phosphate (LFP) batteries, primarily driven by their cost-effectiveness and ease with which system-level safety performance can be achieved. Our forecasts indicate up to a 30 percent chemistry share for LFP across Europe, with up to a 25 percent share here in the UK by 2035. Globally, our analysis points to this being as high as nearly half of all BEVs, at a 45 percent share.
“Because of this increased appetite for LFP chemistries, there is a focus within the report on the UK’s competitiveness for LFP and lithium-manganese-iron-phosphate (LFMP) cells. Understanding this pull, and the potential for LFP and LFMP, highlights the importance of investment in the battery value chain for these chemistries both now and in the future.”
Dr Hadi Moztarzadeh, Head of Technology Trends at the APC, added:
“Any expedited growth ahead of our predictions would lie in the introduction of more models than we are currently expecting. We can say with confidence that the outlook for the UK’s production volumes looks positive, despite a shaky past 12 months and continuing near-term numbers stalling compared to what we had previously anticipated.
“Looking further ahead to the end of the decade offers some comfort as we see steady growth in production volume. Globally, we forecast there will be 105 million cars and vans produced annually by 2035, of which nearly 50 percent will be BEV. Of this global total, we calculate that 1.2 million cars and vans will be produced each year in the UK, of which 1.1 million will be BEV.
“The focus now will be on the supply chains and the ability within Europe and the UK to supply both battery cells and sub-components for localised vehicle production, as production in this area does not currently match the demand requirements. Investment is needed here to establish a resilient supply chain.”
Image of report courtesy of APC
